The Real Value of Exchange Traded Funds

Much ado has been made about the recent crossing of thresholds in financial markets of late. With Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) recently crossing the $1-trillion market capitalization hurdle, psychological barriers are continuing to be broken as we speak.

In the world of cannabis investing, a similar (though markedly smaller) threshold has been surpassed recently – Canada’s largest marijuana-focused exchange traded fund (ETF) has broken through a total asset threshold of $1 billion for the first time in history.

Part of this increase has been due to incredible inflows of capital into the Canadian cannabis production industry, and part of this increase has also been due to the relative valuation increase most firms producing cannabis have continued to see in recent years.

Investors choosing to buy and stick with the Horizons Marijuana Life Sciences ETF have done very well, with their investment more than doubling since inception (less than two years ago), and all sorts of momentum underpinning an industry which can only be characterized as one which is in a state of euphoria. Investors looking to capitalize on the out of this world mania which has manifested itself in this sector would be well-suited for this ETF.

That said, for those investors seeking safety and long term risk-adjusted return, sticking to more conventional and conservative sectors within North America for investment may be the way to go at this point in time.